The Trump administration is implementing a comprehensive overhaul of the H-1B visa program, replacing the decades-old random lottery system with a merit-based selection process that prioritizes higher-skilled and higher-paid foreign workers. The US Citizenship and Immigration Services (USCIS) announced these sweeping changes on December 23, with implementation scheduled for February 27, 2026, affecting the FY 2027 H-1B cap registration season.

Nasscom Raises Comprehensive Concerns

National Association of Software and Service Companies (Nasscom), India's technology industry body, has issued a detailed statement warning of significant risks from the proposed wage-weighted H-1B visa selection system. The organization cautioned that while the intent to promote high-skill employment and protect US wages is understandable, the reform could create substantial legal, economic, and operational challenges.

Nasscom emphasized that assigning multiple selection entries based on wage levels risks shifting the statutory focus away from "specialty occupation" towards wage ranking, potentially leading to regional and occupational distortions. The organization noted that wage levels vary widely by geography and role, which could disadvantage employers operating with moderate but market-appropriate wage structures.

Impact on Different Employer Categories

The proposed wage-weighted system creates distinct challenges for various types of employers in the US technology ecosystem. Nasscom specifically highlighted concerns about how the new system would affect different organizational structures and their ability to secure H-1B talent.

The industry body warned that Level I and Level II wage bands, which often represent entry-level roles for US-educated STEM graduates, form a critical talent pipeline. Restricting these opportunities could weaken future innovation and discourage international students from pursuing advanced education in the US.

Court Upholds Fee Increases

Simultaneously, a US federal judge has ruled that the Trump administration can proceed with its decision to increase H-1B visa application fees to $100,000. US District Judge Beryl Howell rejected arguments from the US Chamber of Commerce, determining that Trump's proclamation was issued under "an express statutory grant of authority to the President."

The judge acknowledged the move could "inflict significant harm on American businesses and institutions of higher education," but found that Congress had provided sufficient authority for the administration's actions. At least two additional lawsuits against the H-1B visa application fee remain ongoing.

Nasscom's Implementation Recommendations

Recognizing the complexity of the proposed changes, Nasscom has called for a more measured approach to implementation. The organization stressed that a sudden transition would increase compliance complexity and disrupt established workforce planning processes across the technology sector.

If a wage-weighted model is pursued, Nasscom emphasized that a phased implementation with adequate lead time, potentially deferred to a later lottery cycle, would be essential to maintain confidence in the US talent and investment environment. The organization urged policymakers to preserve a transparent and trusted visa framework to sustain the strength of the US technology ecosystem.

Broader Implications for Indian IT Sector

These developments significantly impact Indian IT companies and professionals, who have historically been major beneficiaries of the H-1B program. The combination of substantially higher fees and the shift from lottery-based to merit-based selection requires companies to reconfigure their hiring strategies and business models.

Indian IT firms must now adapt to a system that prioritizes higher-skilled positions and increased compensation levels, representing a fundamental departure from the random selection process. The changes align with the Trump administration's broader immigration policies and stated goal of preventing the replacement of American workers with lower-paid foreign alternatives.

The United States Department of Homeland Security has proposed substantial modifications to the H-1B visa program, potentially affecting thousands of Indian students and professionals seeking employment in the US. These changes aim to enhance program integrity and protect American workers' wages and working conditions.

Key Proposed Changes

1. Revision of Cap Exemptions: The proposal includes changes to eligibility criteria for cap exemptions, which could impact non-profit research organizations, universities, and healthcare institutions that currently benefit from these exemptions.

2. Increased Scrutiny: Employers who have previously violated program requirements will face heightened scrutiny.

3. Enhanced Oversight: The proposal includes measures to improve oversight of third-party placements.

4. New Application Fee: A $100,000 mandatory fee has been imposed on new H-1B visa applications, primarily affecting Indian workers in IT services and consulting sectors.

5. Potential Wage-Based Selection: The administration is considering replacing the traditional H-1B lottery system with a wage-based selection process.

Timeline and Impact

The Department of Homeland Security suggests that new rules could be issued as early as December. These changes have the potential to significantly impact the landscape for H-1B visa applicants, particularly those from India working in the IT and consulting industries.

Implications for Indian Professionals

The proposed changes could have far-reaching consequences for Indian students and professionals aspiring to work in the United States. The IT services and consulting sectors, which have traditionally relied heavily on the H-1B program, may face particular challenges under the new rules.

These proposed modifications to the H-1B visa program represent a significant shift in U.S. immigration policy for skilled workers. As the situation develops, potential applicants and current visa holders should stay informed about these changes and their potential impacts on employment opportunities in the United States.